At time of writing, over 611,000 people have died from the COVID-19 virus. These are people who were not expecting to die and it is reasonable to assume that a fair percentage of them held senior positions managing the world’s business.
So you might logically move to another assumption, that the world’s Boards of Directors have been busy making sure their sucession planning for critical positions is up to date and implementable on short notice.
You would be wrong.
According to a new study co-authored by Spencer Stuart and Bain & Company, picked up by Hunt Scanlon, many Boards in turbulent times put leadership succession on hold, even when the subject was high on the agenda before the crisis hit. Every crisis comes with something “more important”.
In the event of forced succession – i.e. the death or incapacity of the executive – lack of an up-to-date plan of succession makes a necessity more difficult than it needed to be. However, it is the issue of leadership efficacy that will endanger an organization more when a Board puts a hold on its succession responsibilities.
“Although boards are reluctant to change leadership during times of crisis, postponing succession creates risks,” says the Spencer Stuart/Bain & Company report. “It can deprive companies of both the leadership needed to navigate a turbulent landscape and the ability to identify and pursue opportunities to win coming out of the crisis.”
The report found evidence that Boards are behaving in the COVID crisis as they have in previous recessions by concentrating on near-term decisions and management stability. In April and May of this year, CEO transitions fell worldwide compared with the same months in 2019, including by one-third in Europe and Asia.
But according to the report, instead of focusing merely on leadership continuity, Boards should be evaluating near-term needs and alignment for the future and be more willing to initiate change.
To obtain alignment around a new leader commonly takes a year, making those who get a head start be best positioned for the future. Before going through such post-crisis change, Boards will prioritize core leadership characteristics such as courage, empathy, humility, learning agility, judgment and the ability to elicit the best ideas from diverse teams.
The report concludes by identifying four areas where CEOs should focus in order to successfully steer their companies through the crisis.
You can access the complete report here: Covid-19: Is Your Board Hitting the Brakes on CEO Succession?,